Storytelling in MMOs might be the greatest challenge any storyteller could ever face: trying to include hundreds or even thousands of audience members in one story, making it personal and meaningful for each of those persons, and then giving each person room to interact with and even affect the story. Frankly, MMOs are a writer's worst nightmare.
If I could change one aspect of MMOs to truly involve all players in the story and unite them, it would be to allow players to affect the factions, motivations and even moods of NPCs.
Some NPCs would be static, as is par for current MMOs. Let's call those characters followers. But other NPCs, particularly the pivotal characters, could be influenced by player actions (combat, dialog, crafting... all actions). Players could coax them to new goals and alliances, give them hope or cause them despair, give or remove the power to accomplish their goals, and more.
Crafters could be involved in both building and dismantling. They could create or destroy bridges, armories (imagine stealing resources by dismantling weapons and armor), repair or damage city fortifications, etc. What they do and to what extent they were successful could convince NPCs that certain goals are possible or impossible. Or NPCs might try their intentions regardless, thereby succeeding or failing due to crafters' efforts.
The dialog choices players make when interacting with these NPCs could affect how those characters treat the next players who interact with them. NPCs could have moods which gradually swing one way or another depending on the mission reports make to them, the news brought to them, or the subjective dialog selections players make. An NPC might be kind and courteous to you one time, even offering special aid or opportunities, but be irritable, dismissive or threatening another time. Some NPCs would change moods easily, while others are hard to sway.
Loyalties, too, could be affected through dialog. A somewhat mercenary NPC might change allegiances depending on where players make his life easiest (mood-affecting choices, bribes, news and misinformation, etc).
Combatants could make decisions that affect NPC plans. If certain resources are not gained, certain areas cleared of enemies or protected, the right or wrong enemy NPCs defeated (not necessarily killed), then it might change the sort of missions NPCs offer. It could change whether those NPCs speak of those plans with hope or despair, and how daring or timid their plans become.
The trickiest part of accomlishing this would be determining the numeric/code circumstance under which NPCs would be, or could be, affected. Most of it would likely be subjective. I would use percentages, rather than hard figures, as the points of change; relative, rather than definite, milestones. In other words, it's not "NPC changes once [x] number of combatants have killed [x] number of FactionA soldiers in battle", but instead what has been accomplished by one player's faction in relation to an opposing faction's counter-actions. It doesn't have to be an even balance between them, either. It's perfectly acceptable, even desired, that more players should choose one faction, class or other path than another.
Anyway, the specifics are not as important as the general goal I'm aiming at. I think making NPCs more dynamic and giving players influence on NPC behavior is a key way to strengthen storytelling in MMOs. There's already been some efforts in that direction, but it doesn't seem to have been a focus of many developers.